If you have been appointed an “agent” in a Durable Power of Attorney that means that the person naming you their agent (called the “principal”) has trusted you to act for and on behalf of them. The right to act on the principal’s behalf comes with a whole host of responsibilities. The most important thing to remember is that the principal’s assets are NOT your assets; their assets are to be used for their well-being.
Some of the agent’s responsibilities include:
- Following the instructions in the power of attorney document (your power may be limited or quite broad, only the document itself contains that information)
- You must never sign the principal’s name when acting as their agent – you should sign as follows:
(Principal’s Name) by (Your Signature) as Agent
- You cannot co-mingle your assets with those of the principal
- You must ensure that the principal’s assets are invested prudently (conservatively, but with investment growth)
- You are considered a “fiduciary” (a guardian if you will) of the principal’s assets, and as such your actions are governed by the Connecticut Fiduciary Powers Act. Therefore, if you are challenged as to your care or use of the principal’s assets you are accountable to the principal and the probate court if a third party demands an accounting.
- Accurate records of all income and expenses must be kept and if a petition is filed in the probate court, an accounting must be provided
- You are responsible for the principal and their beneficiaries for your management of the principal’s assets.
If you are working with third parties (banks, accountants, brokers) make sure they all receive a copy of the Durable Power of Attorney document in advance of making any financial transactions.
Your authority as the agent will remain in effect until:
- the principal revokes the power of attorney to you,
- the principal dies
- the power of attorney is suspended or terminated by the probate court.
It is important to remember that when the principal dies, your authority dies also; you may not make any transactions after the principal’s death. At that point, assets are under the control of the estate executor or administrator and should be turned over to the next fiduciary.
And finally, just because someone has appointed you their agent, does not mean you have to take on the responsibility. If you act as an agent for a period of time and wish to resign you may do so by notifying the principal; oftentimes the Power of Attorney document names a successor agent. If no successor agent is named, the principal (if they still have the capacity to do so) can name someone else. If the principal lacks capacity, the probate court can name someone to act as the conservator of the estate.
If you are considering having a Durable Power of Attorney created for you or a loved one, Attorney Madonna can assist with this service.